Basic income – the case against it.

basic income series
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There are various criticisms levelled at the basic income whenever it is proposed, not least that it’s unaffordable. I’ve given some suggestions on that in the past, but today I want to look at what other people raise as faults in the system.

One of the concerns is that if people are receiving a basic income, lots will give up work. Supposedly this, alongside the fact that there was a higher level of divorce, is one of the reasons quoted as to why the basic income trial in America was discontinued.

I’ve found a number of books and articles discussing the amount of time people cut down on their working. It’s important to note that people knew that this was an experiment, not a permanent state of affairs, so some people may well have maintained jobs they’d otherwise have given up, while others took advantage of leisure time knowing that it wasn’t for ever. Even with that said, people reduced their work patterns by very small percentages – up to 5% for unmarried women. There’s some fascinating discussion of it around Page 99 in this book Ethics and Economics of the Basic Income Guarantee.

This talks about people cutting their hours from 65 to 60. I’d maintain that a system expecting people to work 65 hours a week to be able to survive financially is a pretty rotten system. Is it possible that a basic income might actually do something to rectify that type of situation – might give people a stronger bargaining position to be able to stand up to this type of exploitation?

It is exploitation, expecting people to work that kind of pattern. And it doesn’t do anyone any good. Working longer hours reduces productivity and increases stress levels and sickness. If basic income went some way to cutting back on that, it could only be a good thing.

But this article is supposed to be the case against basic income. So what about the situation where there were higher numbers of divorces?

Well, I tried to research this further as it’s frequently cited as a reason why the basic income experiments were discontinued. But it seems that this particular finding may have been over exagerrated:

Additionally, contrary to prior findings on GAI, which claimed it increases fertility, improves birth outcomes, and causes divorce, Dauphin data from 1974-79 showed:
• No increase in fertility, but weak evidence of delayed childbirth
• No change in birth outcomes (based on birth weight and rate of perinatal deaths)
• No evidence of increased divorce

(From The Town with No Poverty: Health Effects of Guaranteed Annual Income)

So, two major reasons why basic income raises concerns are dismissed as not really being concerns at all. The cost implications are obvious, but I think insufficient reason to dismiss it as a way forward. Granted there are people who stand to make very little from the implementation, and they are also the people who would lose control to a large extent of a compliant workforce – is this the real reason that basic income isn’t up for debate? Because of the effect it would have on a section of society currently running scared?

Basic income is an idea whose time has come, and the more of us that discuss it, research it, and promote it, from all sides of the political spectrum, the better.

About Jax Blunt

I'm the original user, Jax Blunt I've been blogging for ten years, give or take, and if you want to know me, read me :)

Comments

  1. It’s not sufficient for people to say that divorce increased (if it did) without asking the reasons for divorce. I would guess that very few divorces were a result of spending too much time together hanging around the house because of less work hours. Most people who get divorced do so because they are unhappy in their marriage. If a basic income allows people to escape an unhappy marriage, why is this a bad thing? Better to have to stick together for financial reasons and suffer? What sort of a criticism is that?

    • Jax Blunt says:

      It turns out to be a very inaccurate one as later analysis said that rates didn’t increase. I could see that there could be an implication that some women would leave relationships they were previously seen as trapped in, if they had an independent source of income. Like you, I’m not seeing that as a criticism.

  2. Yes let’s get rid of the compliant workforce, it’s like so many people don’t realise or actually passively cooperate with being exploited, it’s very sad x
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    • Jax Blunt says:

      It’s the people moralising about it being a good thing that really get to me. Why should people work for a pittance?

  3. Did you find anything on inflation? If we’re all suddenly £x,000 better off, what’s to stop rents from going up by the same amount, overnight?

  4. chrisotherwise says:

    For me the biggest problems with the basic income remain:

    – Inflation, as flagged above by Ruth. If everybody’s got £xxx then £xxx is going to drop in value quite considerably – and we’ll be back where we started.

    – What to do about the (very large) number of people who currently receive more than the basic income would be.

    – What to do about single parents who will be vastly worse off after a split

    – What to do about housing benefit and variations round the country. If basic income doesn’t include HB then you’ve still got a mess. If it does then you’ll probably have to vary it by region which is also messy.

    – What to do about (currently non-earning) SAHMs married to high-earning spouses. Will they suddenly get a huge boost in family income? Won’t everybody think this is unfair?

    – How will you tax earned income so that you don’t dissuade people from working yet still bring in enough to fund the basic income? For example, if the basic income was introduced I’d probably do a couple of days consultancy a week and take the rest of the time off. Would you hammer me in tax for that?

    Chris.

    ps.. This is a fascinating discussion. Hope you can come to Rendlesham so we can put the world to rights with appropriate amounts of wine :-)

    • Re: higher (or just less low!) earners: There are various models, but I think the one that we’re debating here would give the basic income to everyone – not means tested (and therefore dazzlingly cheap to administer), and giving every section of society the sense of having benefited from the policy, which helps with the resentment issues.

      Re: single parents: Single parents are, and will always be, worse off after a split. It’s cheaper to live in groups, whether you’re on minimum wage or a whacking great salary. At least this way, there will be SOME money to live on, for people who might otherwise feel unable to leave at all.

      Re: SAHMs: No reason why SAHMs should trigger resentment for getting exactly the same as everyone else. If no-one is thinking “Why don’t I get it?” then why should they mind that other people get it too? Universal benefits are great for this. Everybody wins.

      Re: tax, I would imagine that more or less normal tax rules would be in place, but without the tax-free allowance. You’d be taxed on all your earned income, with a step up on the percentage at certain points. It would be fine for you to reduce your hours, leaving work available for someone who wants it more, and giving you opportunities to do something less lucrative with your time – something creative, or caring for someone, or something educational. Start a business. The pilot tests that have been done suggest that people do actually do those things, with a net gain for the economy. Everybody wins.

      The other questions I don’t have answers to, though! ;-)

      • chrisotherwise says:

        “Re: higher (or just less low!) earners: There are various models, but I think the one that we’re debating here would give the basic income to everyone – not means tested (and therefore dazzlingly cheap to administer), and giving every section of society the sense of having benefited from the policy, which helps with the resentment issues.”

        Sorry, I actually meant people who are on a higher level of benefits than the BI would provide. At present a low-earning single parent with 3 children can quite easily receive over £20,000 in benefits – there’s no way we could afford for the BI to be that much for everybody.

        “Re: SAHMs: No reason why SAHMs should trigger resentment for getting exactly the same as everyone else. If no-one is thinking “Why don’t I get it?” then why should they mind that other people get it too? Universal benefits are great for this. Everybody wins.”

        So the family with a banker earning £500,000 a year gets another £10,000, while the unemployed single mum gets no change or a slight cut in income – and people won’t think that’s unfair? Really????

        • I see what you mean.

          People whose benefits add up to more than £10000 are generally claiming high rates of child related benefits and housing benefit, and possibly disability benefits, too.

          I would assume that there would be a child rate (less than the adult one, but enough to at least feed and clothe a child with), which would cut some of the difference between the basic income and the current benefit cap at £24000. For myself I’d like to see something like the old non-means-tested DLA to cover the additional costs of disability, too.

          Housing Benefit is a tricky one. If you were bringing home £10,000 in earned income, now, you wouldn’t be entitled to it, so there’s no logical reason why anyone should be entitled to it under basic income either. But I agree, that if it amounts to a pay cut, that’s a problem.

          The advantage of basic income over benefits is that it solves the old “making work pay” chestnut once and for all. If its not quite enough, you can choose to work, and know that you’ll be better off – the DWP won’t be trying to claw back what they gave you out of your earnings. It makes it easier to work, and takes the financial risk out of it. You can take a short term job, without worrying that it’ll take them 3 months to get your benefits right again at the end.

          • As an aside, I would very much like to see a social housing policy based on affordable social housing being available to anyone who wants it. None of this points-based allocation – there should be enough so that affordable rented property is available to anyone. Mixing up communities in this way might help with the ghettoisation of council estates, and it put housing costs within the reach of Basic Income.

            But that’s a whole other (related but different) debate.

  5. Many right wingers are in favour of basic income because it sweeps away all the assessment bureaucracy to level things out to one payment for all. For me I see this as those most in need getting less. Yes everyone gets something but those who need most will lose out.

    People have said “oh but they will still get extra on top” but if you look at most of the arguments for it there is no mention of this. If it is a system where everyone gets the same but those most in need get extra (as they do now) there is no case for it because of simplification or saving money. It is just a “same as now, but those who don’t need a payment get one too”.

    There has to be losers and it will be those most in need that will lose. I can’t support a system like that.

  6. I would like to see the citizen’s income plus an overhaul of the planning rules and regulations so that it would be possible for people to very cheaply build their own, sustainable, homes with space to grow food, which would help reduce all manner of issues around food and energy security, potentially prevent massive rent hikes firvthose in rented property, and mean that the income went further as food and energy bills would be reduced. Pie in the sky? I dont think we’ll have much choice before much longer anyway.

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